Impact of Globalization on Organizational Structure and Strategies

This essay examines the impact of globalization on organizational structures, highlighting the need for companies to adapt to changing competitive trends driven by technology and communication advancements. It discusses various globalization strategies, including globalization strategy, export strategy, multi-domestic strategy, and global plus multidimensional strategy, each influencing organizational structure differently. The essay also explores market entry strategies such as licensing, joint ventures, and consortia, emphasizing how each approach affects the organization's operations and structure in a global context. The analysis underscores the importance of leaders possessing a global perspective to navigate diverse markets and effectively implement global organizational structures.

Globalization
in Organization
Structure
Student’s Name:
Institution:

Introduction
 Presently, competitive trends have changed due
to changing technology and widespread use of
communication (Cavusgil et al., 2014).
 Many companies have expanded to international
markets (Young and Ghoshal, 2016).
 This calls for an understanding of:
( a)-different markets from a global perspective
(b)-a global organization structure.
 Therefore it requires leaders with a global
perspective (Cavusgil et al., 2014).

Globalization
Strategy
Model

Globalization
Strategy
Model
 Globalization Strategy: This is characterized by global
products that are standardized, there is economies of scale,
and cross-cultural learning. Example is Texas instruments
(Young and Ghoshal, 2016).
 Export Strategy: characterized by international division,
export/import of products, and licensing of existing
products. Example is US steel (Cavusgil et al., 2014).
 Multi-domestic: adopts global geographic structure-
employs existing domestic models in a global perspective
e.g. franchising. Example-McDonald (Young and
Ghoshal, 2016).
 Global plus multidimensional: adopts a global matrix-
there is movement of good, people, and ideas borders;
there is economies of scale and cross-cultural learning e.g.
Coca-Cola (Cavusgil et al., 2014).
Across the horizontal axis are increasing forces of national
responsiveness.
Up vertically are increasing forces of global integration.

 Licensing –a firm allows another firm to develop products on behalf of
them. This is applicable when a company does not have the technology
to produce on their own or where a manufacturing firm does not have
the know-how of the market. Therefore, another firm engages in selling
especially in local markets (Cavusgil et al., 2014).
 Joint Ventures –two firms come together to enter a competitive market
for shared mutual benefits and risks. They maintain their individual
entities but operate as one company. The small company benefits from a
bigger company’s resources such as R &D, manufacturing, technology,
etc. (tradestart, 2019).
 Consortia –a group of companies or individual come together to work
for a common objective or putting together resources to achieve a
common goal. It increases the chances of succeeding. This is because
there is sharing of development expenses which lessens overhead costs
(Cavusgil et al., 2014).
In general, every strategy is different and its application influences the
structure of the organization in a different way.

References
1. Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G.
and Rose, E.L., 2014. International business. Pearson Australia.
2. tradestart, 2019. Market Entry Strategies. Available from:
http://www.tradestart.ca/market-entry-strategies
3. Young, C. and Ghoshal, S., 2016. Organization theory and the
multinational corporation. Springer.